Should buyers be looking at For Sale By Owners? Can a buyer find a good deal with For Sale By Owners (FSBOs)? Here’s the truth about FBSOs that may surprise you.
The Truth About For Sale By Owners
Every FSBO I’ve ever talked to had a bad experience with a Realtor. A lot of people, not just FSBOs, had bad experiences with Realtors. That’s not front page news. Unfortunately, instead of finding a professional Realtor who really is honest and competent, For Sale By Owners take a different path. They decide to become their own experts. In over 85% of the cases, FSBOs eventually give up and re-list with a Realtor according to a study by the National Association of Realtors.
For Sale By Owners make their first mistake hiring the wrong real estate agent. They compound that mistake by becoming their own Realtor even though they don’t have the knowledge and experience. I would estimate the failure rate for all FSBOs at 98%. It’s not a pretty picture.
For Sale By Owners in MLS
FSBOs are not allowed to advertise in the two primary MLS sites in Clallam County. That means they don’t get the massive exposure they desperately need to reach all the potential buyers. But there are a couple of brokerages that sell a FSBO package for a flat fee of $250 to $450. For that they put the listing in the MLS, but that’s about it. So how does this work out for FSBOs? Not so good. Every FSBO I’ve talked to who has used one of these services was very disappointed and felt like they got ripped off.
For Sale By Owners Fail
I actually called on a FSBO that was listed in the Northwest MLS, because a buyer was interested in the home. Most sellers would be very delighted to have a potential buyer look at their home, but this FSBO was actually rude on the phone from the get go. He asked personal questions on the phone about my clients, but of course, I would not answer confidential information about my clients. It was surprising. He then told me he had other plans and did not want his home showed. No wonder Realtors don’t like to show and sell FSBO homes, and no wonder For Sale By Owners can’t get their homes sold. Sellers cannot and should not be confrontational or rude on the phone to a potential buyer or a buyer’s agent. It’s just crazy.
I communicate typically for months with my buyers, and I know whether they are qualified to buy a home. All my clients have been through my qualification process by the time we start viewing homes. I keep that qualification process confidential. I doubt that very many FSBOs have communicated with potential buyers for months to learn about whether they are qualified or not, and most FSBOs don’t have the training and experience to qualify buyers. A few questions on the phone do not necessarily prove they are qualified.
By the way, the clients I wanted to show the FSBO to are paying cash for a home in the $400,000 plus range. Wow, this FSBO sure missed a qualified buyer by brushing me off! I believe that FSBO thought my clients weren’t qualified. Big mistake. But this is another reason why sellers should list with a professional Realtor. FSBOs make mistakes, some out of ignorance, but other mistakes are made by FSBOs who are totally sincere. It doesn’t matter, any mistake that hinders the sale of a home is a big mistake.
The rest of the story is For Sale By Owners are most often overpriced, and they are quite often very difficult to deal with. I have over three decades of observing FSBOs. It may sound harsh, but honestly, if buyers asked me, I would say don’t bother when it comes to For Sale By Owners. As friendly and positive as I am on the phone when I call a seller, I have to say that the majority of FSBOs that I have called in three decades tend to be confrontational and rather rude on the first phone call. I can only speculate why that would be, but the bottom line is For Sale By Owners are difficult to deal with.
Last Updated on August 8, 2013 by Chuck Marunde